JP2 is the file extension for the new image format called
JPEG2000 based on state-of-the-art wavelet compression. The
JPEG2000 architecture advances a number of different
applications in the digital
imaging market, everything from digital cameras, pre-press,
medical imaging and other key sectors.

JPEG2000, Part 1 (the core system), is a published
international ISO standard (ISO 15444). It offers both
lossless and lossy compression and provides much better
image quality at smaller filesizes than JPG does.

JPEG2000, Part 6 (for mixed raster content), is also
a published international ISO standard (ISO 15444/6). Also
known as JPM format, it is aimed at compressing scanned color
documents containing both bitonal elements as well as images.